CARF Bill approved by Brazilian Federal Senate

On August 30, 2023, the Brazilian Federal Senate voted and approved, by 34 votes to 27, Bill No. 2,384/2023 (CARF Bill), which reestablishes the tie-breaker vote within the Administrative Tax Appeals Council (CARF), as well as provides for the tax transaction and possibilities of reducing the regular (75%) and qualified (150%) ex-officio penalties.

The text, approved by the Brazilian Federal Senate and which included wording amendments No. 23 and No. 26, did not undergo any substantial changes as regards the text previously approved by the House of Representatives and advances to the presidential sanction/veto phase for appreciation within 15 working days.

It is worth highlighting that the CARF Bill, aimed at reducing litigation and promoting self-regularization, upheld favorable aspects, as described below:

• Regular ex-officio fine reduction of 1/3 and its suspension based on taxpayers’ compliance history.
• Criteria readjustment for the application of the ex-officio fine and its reduction from 150% to 100%, maintaining the 150% percentage only for cases of willful misconduct recurrence.
• Deadline extension for payment of tax credits and the possibility of cumulating fine and interest reductions provided for in the compliance program, with other discounts already provided for in the tax legislation.
• Mandatory submission of self-regularization alternatives by the Brazilian Federal Revenue Office (RFB).

For further information on both the content of the CARF Bill and our infographics, in English and Portuguese, please access the links below:

https://www.demarest.com.br/camara-aprova-retorno-do-voto-de-qualidade-com-inovacoes/ https://www.demarest.com.br/en/house-of-representatives-reinstates-tiebreaker-vote-with-innovations/.

Demarest’s Tax team is monitoring this topic and is available to provide any further clarifications that may be necessary.